Number of Australian first home buyers hits record low
The number of Australians entering the housing market hit a record low over the month of August.
Housing finance data released by the Australian Bureau of Statistics has revealed that just 6,054 first home buyers committed to housing finance over the month, a figure that (outside of the seasonally low months of January and February) is the lowest recorded since June 2000.
In addition, only 77,869 first time buyers committed to home loans over the year ending August 2014, the lowest annual figure on record.
Expressed proportionally, the figure was also a record low, with just 11.8% of all owner-occupier housing commitments being taken out by first home buyers.
On a regional basis, the eastern states and territories fared the worst. New South Wales, Victoria, Queensland and the ACT each recorded first home buyers to be less than 12% of all owner-occupier housing finance commitments.
The drop in first home buyers can be attributed to various factors, most noticeably growth in housing prices occurring at a far greater rate than growth in wages, and the shrinking of First Home Buyers Grants.
These shifts have prompted some to question whether young people should be able to access their superannuation accounts early in order to finance the purchase of their first home.
The idea is currently being mooted by Independent South Australian Senator Nick Xenophon, who believes that young Australians should be able to reinvest their super in bricks and mortar.
The scheme envisaged by Xenophon would be similar to the one currently in place in Canada, where first home buyers are able to withdraw up to $25,000 from their superannuation account to buy or build a home.
In response to Xenophon’s proposal, Mozo surveyed Gen Y first home buyers about how they would like to fund their first home, and 47% of respondents expressed a desire to tap into their super to put together a deposit.
However, Finance Minister Mathias Cormann has spoken out against the idea.
“Increasing the amount of money going into real estate by facilitating access to super savings pre-retirement will not improve housing affordability,” he told news.com.au.
“It would increase demand for housing and, all other things being equal, would actually drive up house prices by more.”
Are you a first home buyer looking to get a foot in the property door? Head on over to Mozo’s newly launched first home buyers hub for helpful tips and tools.